Weekly newsletter for women who want to be smart about money: financial news, personal finance and investing
Welcome to our #40 weekly newsletter in 2020.
Every week we curate key content and apply a female-lens so you can stay informed and inspired about money and investing.
Stay in the know.
Keep on top of global economic, financial and investing news and trends. And read about what this means for you and your money in 2020 during Covid-19 and beyond.
If you’re short on time, listen to the editorial on audio for a brief overview.
“For women who are taking control of their financial future”
-Jana Hlistova
From The Purse…
Editorial from the Founder
Global equity markets are on track for an all-time high, despite the resurgence in Covid-19 cases. Global stocks have gained $3.5tn in market cap this week, almost equal to the GDP of Germany. Investors continue to position ahead of Q3 earnings reports, the US elections and a ‘breakthrough’ vaccine.
The US Federal Reserve has warned of a weak US economic recovery ‘if adequate and timely stimulus is not passed’.
The Democrats have agreed on a stimulus bill for $2.2tn, however the Republicans won’t back the measure.
UK GDP slowed in August, rising just 2.1% month-on-month, versus the forecast 4.4% by economists.
And the UK furlough scheme has been extended to firms affected by the local and national lockdowns in the next 6 months.
Read about how billionaires have been able to increase their wealth by $10.2tn during the pandemic.
In the Your Money section, how can you financially prepare for a second wave of coronavirus and how do you protect your money from negative interest rates (this is likely to be introduced in the UK sometime in 2021).
We highlight the US payment company Square, which bought $50m of Bitcoin last week.
Meanwhile, older female divorcees could be missing out on £50,000 in state pension.
And we’re tracking UK sextech start-up called Kama founded by CEO, Chloe Macintosh. Kama is a sexual wellbeing app that combines modern science and ancient wisdom into easy-to-follow daily practices.
If you have time, watch the TED Talk with Jacqueline Novogratz about What it takes to make a change. Jacqueline shares stories from her career dedicated to tackling poverty and offers three principles to spark and sustain a moral revolution.
Stay safe, look after yourselves and your loved ones.
I hope you enjoy this week’s newsletter. Until next week,
Jana
The Big Picture
Global markets and economy news, trends and indicators
The Coronavirus Effect:
Global equity markets are on course for an all-time high, despite resurgence in Covid-19 cases.
Global stocks have gained $3.5tn in market cap this week, almost equal to the GDP of Germany.
Investors continue to position ahead of Q3 earnings reports, the US elections and a ‘breakthrough’ vaccine.
The US Federal Reserve warns of a weak economic recovery (unless more stimulus)
The Federal Reserve Chairman, Jeremy Powell, has warned that ‘failure to pass adequate and timely stimulus endangers the US economic recovery’.
The Democrats passed a stimulus bill for $2.2trillion, however the Republicans won’t back the measure.
On Friday, Trump raised the coronavirus stimulus offer to $1.8trillion
The plan is an increase from $1.6trillion, but still $400bn less than what the Democrats are proposing.
UK GDP slowed in August (rising just 2.1% month-on-month)
This is below economic forecasts of 4.4%.
UK confirms extended furlough scheme for firms hit by lockdowns
UK Chancellor, Rishi Sunak has extended the furlough scheme (beyond October 31), to businesses which will be affected by local or national lockdowns.
The government will pay 67% of worker salaries, up to a maximum of £2,100 a month.
Future Focus
Keeping an eye on key predictions, innovations and what’s going to impact the future
Billionaires’ wealth rises $10.2tn amid Covid crisis
A report by Swiss bank UBS found that billionaires increased their wealth by 27.5% (at the height of the crisis from April to July).
They mostly benefited from betting on the recovery of global stock markets (from the global lockdowns in March and April).
The shares in some technology companies – which are often owned by billionaires – have risen very sharply.
Your Money
Insights, trends and what this means for you and your purse
How to financially prepare for a second wave of coronavirus
Save while you can and pay off debts.
Make a budget and cut corners where possible.
Use free resources and be smarter with your money.
Prep your CV and build your network now.
Look after your mental health.
UK: How can you protect your money from negative interest rates?
In the UK, negative interest rates are unlikely until 2021.
The biggest risk is for savers as the return on cash could be negative. And the value of sterling is likely to go down.
Here are 3 alternatives to holding cash:
Invest in overseas companies/equities away from sterling (your return will be higher).
Invest in gold (often regarded as a store of value for investors).
Invest in smaller companies as ‘good hunting ground for businesses which can grow in niche markets or utilise new technologies to transform industries’. (However this is not without its risks).
Almost 90% investors are modifying their investment portfolio
Many investors are turning to alternative investments to spread risk because of the pandemic.
New research by cask whisky investment specialists, Whiskey & Wealth Club, revealed that many investors favour established alternative assets:
31% invest in art
28% invest in antiques
24% in wine.
Companies: winners & losers
Companies to watch and share price movements
Square, a payment company, buys 4,709 Bitcoin worth approximately $50 million
This is approximately 1% of Square’s total assets (end of Q2 2020).
‘Square believes that cryptocurrency is an instrument of economic empowerment and provides a way for the world to participate in a global monetary system, which aligns with the company’s purpose’.
Square has enabled it clients to buy bitcoin on its Cash App since 2018.
According to Outspoken technology investor Chamath Palihapitiya: ‘This is an instrument we use as a hedge…You buy it, you hold it, you put it away and you hope that you never need it’.
Peloton’s market cap reached a record $34bn (but it may be worth less than half)
Peloton Interactive, the luxury home fitness equipment provider, is one of Wall Street's darling stocks of the pandemic.
For its fourth quarter, Peloton announced outstanding financial results demonstrating significant growth:
There is concern by one Wall Street analysts (out of 23), BMO Capital Markets' Simeon Siegel, that Peloton is underperforming and is an overvalued stock. Specifically, Siegel is concerned about Peloton's expected market size and the growing number of viable competitors in the marketplace.
In the Spotlight
Is there a topic you'd like us to Spotlight? Please tweet @jointhepurse
Why are the global markets rising despite the slowing down of the economy?
The FTSE 100 rose 0.5% on Friday morning, despite the UK economy growing more slowly than expected in August (2.1% vs the forecast 4.4%).
And last week, global equities gained $3.5tn in market cap, despite the rise in Covid cases.
Crucially, corporations have not felt the economic pain of the pandemic in the way small businesses have.
Instead investors are focused on further stimulus talks in the US, after Trump made a new coronavirus stimulus offer of $1.8tn on Friday.
Investors continue to position for Q3 earnings reports, the US elections and a breakthrough vaccine.
Source: UK Investor Magazine
Have You Seen This?
Female-focused news, reports, research, campaigns
Older female divorcees could be missing out on £50,000 in state pension
A complex and little-known system means female divorcees are often unaware they are due extra income, which could cost them as much as £50,000 over the course of their retirement. The issue is whether they passed the state pension age when they split from their former husband.
“Any woman who reached pension age before 6 April 2016 and has since got divorced should contact the DWP if she is not on a full basic state pension, to see if she is entitled to an increase based on her ex-husband’s contributions”.
“State pensions are all too often disregarded during divorce when they should be one of the first things looked at.”
Know this: based on research, women often do not consider their partner’s pension during a ‘divorce negotiation’. The marital home is considered the primary asset and the pension can frequently be ‘forgotten’. Make sure you understand as much as you can about your own pension or you can set up a SIPP online (self-invested personal pension). And if you are married, talk to your partner about their pension assets.
US: Women are leaving the workforce at four times the rate of men
September, 865,000 women over 20 dropped out of the American workforce compared with 216,000 men in the same age group.
"The child care crisis is wreaking havoc on women's employment."
Women got hit hardest, earliest by layoffs in restaurants, retail, and health care — industries that were hard hit by the pandemic and which employ a lot of women.
Know this: we are going through what is now referred to as a ‘she-cession’. Women are more adversely affected than men during the pandemic crisis. The Purse has been covering this a lot during the pandemic. It’s crucial we understand what is going on for women and by implication, consider the impact this will have on our money, and more specifically, our net worth. This is not always easy to do with so many demands on our time. But make time to review your expenditure, if you have had to cut your pension contributions, can your partner make up the shortfall? It may be a good idea to set a regular ‘money date’ with your partner or with yourself once a week (or once a month). The idea is to monitor where you are, how you might ‘optimise your budget’ and track changes or reductions in savings/pension and investment contributions. And if you have had to reduce your contributions to your savings/pension or investments, make a plan for how and when you will be able to make up for these shortfalls.
What We’re Tracking
Female-focused products or services, start-ups and businesses led by women, investment, crowdfunding campaigns and research.
Kama: (UK)-founded by CEO, Chloe Macintosh (co-founder of Made.com)-is a sexual wellbeing app that combines modern science and ancient wisdom into easy-to-follow daily practices.
The sextech startup has raised $3m in seed funding during the pandemic-(which is no mean feat).
Investors include the Female Founders Fund and January Ventures among others.
In 2017, the size of the global sexual wellness market was over $26 billion, and is forecasted to reach to about $37.2 billion by 2025.
Sextech feeds into mental health, fertility, and many other personal wellness and consumer healthcare categories, and with the rise of female empowerment this sector is poised for growth.
US: Quarterly VC funding for female founders drops to three-year low
Venture funding for female founders has hit its lowest quarterly total in three years.
Firms invested a total of $434 million in Q3—the lowest figure since the second quarter of 2017, according to PitchBook data. The third quarter total also amounts to a 48% drop in funding from Q2, when female founders received $841 million across 132 deals.
According to Leslie Feinzaig, founder and CEO of the Female Founders Alliance, in the face of uncertainty, many VCs have stayed closer to their networks (which shuts women and minorities out).
Money Habits of the Week
Do you have a money habit you would like to share with us? Tweet @jointhepurse
Check how much you have in your emergency fund.
Remember the goal is for you to be able to cover your expenses for at least 6 months (if you are made redundant)-ideally up to 12 months.
This is should be in a separate account which you can easily access.
You may need to dip into it now if you have lost your job or you are supporting your partner who has.
If you are currently earning, work out whether you can increase how much you can contribute to your emergency fund, on a monthly basis.
For example, if you are paying in 10% of your net salary a month, can you increase this by 1%-2%+ every 30 days?
Reach out to a financial adviser if you need to.
Keep learning and stay engaged.
What We’re Watching
Jacqueline Novogratz works to enable human flourishing. Her organisation, Acumen, invests in people, companies and ideas that see capital and networks as means, not ends, to solving the toughest issues of poverty.
Watch this TED talk called What It Takes to Make Change, Jacqueline shares stories from her pioneering career dedicated to tackling poverty and offers three principles to spark and sustain a moral revolution. Learn how you can commit (or recommit) to creating big, positive change in your lifetime -- and give back more to the world than you take from it. "It is in the darkest times that we have the chance to find our deepest beauty," Novogratz says.
Coffee Break? Read This
Women bear the brunt of Covid-related work stress, UK study finds
Nobel Prize in chemistry awarded to two women for work on genome editing
We’d love to hear from you. Get in touch with Jana via the The Purse website or tweet @jointhepurse and @janicka.
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